minister says that without privatization, only the “bone” remains – Legislation – Tecnoblog

Minister Fábio Faria, from the Ministry of Communications, once again defended the Postal Service privatization project this Wednesday morning (20), at a hearing at the Federal Senate’s CAE (Economic Affairs Commission). For Faria, if the state-owned company is not bought, competitors of the private sector should keep most of the parcel delivery services, leaving the Postal and Telegraph Company (ECT) with “only the bone” of its function, which is the exchange of correspondence.


Post Office Unit (image: Marcelo Camargo/Agência Brasil)

Minister blames employee strikes for lost revenue

It was Fábio Faria who opened the CAE hearing this Wednesday in the Senate. During his speech, the Minister of Communications stressed that private companies are seeking alternatives to the Post Office to deliver while state-owned employees were on strike. “When the strike ends, these companies do not return to the Post Office,” said Faria.

For the minister, the strikes are responsible for a great loss, around 20% to 30%, of the market share of parcel deliveries and revenues.

“In the last 10 years we have had 12 strikes. Last year alone, it had a 35-day stoppage. In it, other companies such as Mercado Livre and Magalu used practically only the Correios. Today these companies only use 10% because they need to guarantee delivery. They couldn’t stop.”

Retailers circumvented the stoppages by reinforcing the logistics network itself, which leads to the loss of ECT’s revenue.

Fábio Faria pointed out that, in order for Correios not to lose participation in the sector, the state-owned company would have to invest R$ 2.5 billion in relation to national and global private companies. But some of them “invest 3 to 4 times more than the Post Office”, highlighted the minister.


Fábio Faria speaks to CAE, from the Federal Senate (Image: Leopoldo Silva/Agência Senado)

On the other hand, Faria praised Correios, but criticized the company’s financial management which, despite being present in 5,568 Brazilian municipalities, recorded a 57.6% drop in the volume of correspondence between 2015 and 2021. During this period, ECT also suffered with a 43% loss in revenue.

Two weeks ago, union members from associations of postal workers were heard by the Senate. In testimony, they called the privatization of the state-owned company “unconstitutional”. The opposition echoed the criticism, adding that the proposal was “unnecessary”.

Government wants to privatize Correios by July 2022

Also according to the minister, the government wants to privatize the Correios by July 2022. Faria takes into account the time taken for processing and approval by the Senate, the public consultation stage and the green light of the notice by the TCU (Court of Accounts of the Union) — considers the PL to be from 30 to 90 in court.

After TCU’s approval, the government would have to consolidate the privatization of Correios, something that would take another 3 months, calculates the Minister of Communications. The privatization proposal was approved by the Chamber of Deputies in August.

Even with privatization, the Postal Service Bill provides for the universalization of postal services and the creation of a social tariff for people who are unable to pay for the delivery of parcels. It is up to the company that buys ECT to improve the delivery service and find technological solutions to speed it up.

But, for the leader of the PT (Workers’ Party) in the Senate, senator Paulo Rocha, the private sector will not be able to attend to those who live in the “remnants” of a country of continental dimensions.

Another criticism of the PT senator is that private companies should not have the mission to universalize the postal service as a priority, since they “only go after [locais] where there is profitability”.

With information: EBC and Folha

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